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Ashtead Group

Ashtead Group Plc Final Results

Ashtead Group plc (LON:AHT) audited results for the year and unaudited results for the fourth quarter ended 30 April 2019

Fourth quarterYear
Underlying results2, 3
Rental revenue1,014.40798.719%4,138.003,418.2018%
Profit before taxation222.5185.311%1,110.20927.317%
Earnings per share35.0p25.1p29%174.2p127.5p33%
Statutory results
Profit before taxation208.6174.710%1,059.50862.120%
Profit after taxation4154.599.934%796.9968.8-20%
Earnings per share432.8p20.6p40%166.1p195.3p-17%

Full year highlights

·          Revenue up 19%1; rental revenue up 18%1

·          Pre-tax profit2 of £1,110m (2018: £927m)

·          Earnings per share2 up 33%1 to 174.2p (2018: 127.5p)

·          Post-tax profit4 of £797m (2018: £969m)

·          £1.6bn of capital invested in the business (2018: £1.2bn)

·          £622m spent on bolt-on acquisitions (2018: £392m)

·          Net debt to EBITDA leverage1 of 1.8 times (2018: 1.6 times)

·          Proposed final dividend of 33.5p, making 40.0p for the full year, up 21% (2018: 33.0p)

1 Calculated at constant exchange rates applying current period exchange rates.

2 Underlying results are stated before exceptional items and intangible amortisation.

3 Throughout this announcement we refer to a number of alternative performance measures which are defined in the Glossary on page 39.

4 Prior year profit after tax and earnings per share figures include a one-off benefit from the US Tax Cuts and Jobs Act of 2017.

Ashtead’s chief executive, Brendan Horgan, commented:

“The Group delivered a strong quarter with good performance across the business.  As a result, Group rental revenue increased 18% for the year and underlying pre-tax profit increased 17% to £1,110m, both at constant exchange rates.

We continue to experience strong end markets in North America and are executing well on our strategy of organic growth supplemented by targeted bolt-on acquisitions.  We invested £1.6bn in capital and a further £622m on bolt-on acquisitions in the period, which has added 146 locations across the Group.  This investment reflects the structural growth opportunity that we continue to see in the business as we broaden our product offering, geographic reach and end markets, thus increasing market share and diversifying our business.

We remain focused on responsible growth.  Our increasing scale and strong margins are delivering good earnings growth and significant free cash flow generation.  This provides significant operational and financial flexibility, enabling us to invest in the long-term structural growth opportunity and enhance returns to shareholders, while maintaining leverage within our target range of 1.5 to 2.0 times net debt to EBITDA.  We have spent £675m under our share buyback programme announced in December 2017, which has now concluded, and expect to spend a minimum of £500m on share buybacks in 2019/20.

Our business continues to perform well in supportive end markets.  Looking forward, we anticipate a similar level of capital expenditure in 2019/20, consistent with our strategic plan.  So, with our business performing well and a strong balance sheet to support our plans, the Board continues to look to the medium term with confidence.”

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